Asked by Delaney DeAvila on Jun 18, 2024

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If GDP increases,

A) real GDP must remain constant.
B) real GDP will increase only if the inflation rate is higher than the rate of increase in GDP.
C) real GDP must decrease.
D) real GDP must increase.
E) real GDP could increase,decrease,or remain the same.

Real GDP

A measure of a country's economic output that accounts for changes in the price level, adjusting for inflation or deflation to reflect the true value of goods and services produced.

Inflation Rate

The rise in the average price level of goods and services within an economy throughout a specific time frame.

  • Identify the relationship between nominal GDP, real GDP, and the GDP deflator as indicators of economic health.
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JH
Joshua HicksJun 21, 2024
Final Answer :
E
Explanation :
Real GDP adjusts for inflation, so if nominal GDP increases, real GDP could increase, decrease, or remain the same depending on how prices have changed. If prices have increased faster than nominal GDP, real GDP could decrease; if prices have increased slower than nominal GDP, real GDP could increase; if prices have remained constant, real GDP would increase at the same rate as nominal GDP.